How I Invest My Money (2021)

all right so in this video i thought i'd show you how i'm investing my money in 2021 and the purpose of the video is basically to give you some ideas potentially about how you could be investing your money and also to give you some insight into just how i'm thinking about investing my money so let's straight away give a quick overview of my investment strategy for 2021 which is basically this index funds some individual stocks businesses like this channel other business ideas and potentially startup investing and lastly we have real estate and cryptocurrencies so how do i actually use all of these strategies and first off i just want to say that this is of course not financial advice of any kind this is just how i'm thinking about this at the current moment okay so as of right now i'm not currently implementing all these strategies to the point where i would maybe like to in the future but as of right now these are the strategies that i am implementing to some degree and also what i'll be doing or focusing on in the coming year so first let me just show you my current breakdown and also my goal breakdown and then we can look into how i'm thinking about each individual investment strategy so here's one pie chart showing my current asset allocation by percentage and on the left we see my future plan or what my goal breakdown would be real estate 47.5 businesses 25 index funds 20 stocks 6.5 and cryptocurrencies 1 and then the goal is businesses 40 real estate 35 percent index funds 17 stocks six percent and cryptocurrencies two percent now the reason that i want businesses to be a bigger part than it is today is that the goal scenario is that i'm investing in startups and my own other businesses which means that if these investments pan out then they can have the potential to take up quite a big portion no matter how that goes i'm kind of expecting or at least hoping that that would be quite a big portion but now let's get into and break down how i'm thinking about each individual strategy in 2021 so firstly we have index funds and this is basically going to be and have been my way of actually storing value for a while now and notice that i didn't say store of money and that's for a very specific reason and that is because of the fact that storing money is essentially useless because of a little thing called inflation inflation basically means that if you put your money that you made today away in a vault then 10 years from now that money won't be worth as much as it was when you put it away this is why you can ask your grandparents what they bought their house for and what it is worth today you'll see that had they not bought the house but instead put the money away in a vault they would not have been able to afford the same house if they tried to buy it today and this is inflation and that is why you don't want to be storing money because you want to be storing value and your grandparents house then is a decent example of a way to store value they used the value of the money that they had at the time to buy something that maintained or even potentially increased in value over time while at the same time the amount of money they used to buy the house decreased in value so that is basically my number one tip is to avoid and to protect yourself against inflation and it can seem like it isn't a lot and it can seem like something that you just like oh well yeah i know about inflation but i'm not going to care about it for right now and that's really bad because yes over a year you may not notice that over two years you may not notice it but over 10 years you're definitely going to notice it which means that if you only ever save your money into a bank account you're basically going to be stuck in this fairly destructive race where you're basically just saving more and more money each year but your money that you've had in your bank account just decreases in value and let's say that you want to buy a house that house just keeps increasing value almost to the point or to the same extent that you're making the money which means that you're never gonna have enough money to actually buy the house so even though you keep saving you just never have enough money and for me the best way to protect against this is to buy index funds and this also comes with the caveat of time i'm prepared to keep my money in the index funds for a long time which means that even if the the economy crashes or something like that i will be prepared to just keep my money in there until the economy rebounds and this is not entirely without risk because if we look back at pretty much every historical market crash that has happened i would say that the people that it happened to would have said that this has never happened before and it really hadn't in many cases yes there had been crashes before but not for the same reasons meaning that right now if you were to look at historical data then a reasonable conclusion would be that the market seems to just always rebound anytime there's a massive crash the market seems to rebound a little bit later and end up higher than it was before the crash and this is because it's done so every time in the past but the problem with this is that most of the biggest crashes that have happened throughout history were due or were caused by things that had never happened before so this means that just because something has been a certain way in the past doesn't mean that it'll be that way in the future so we may just be fooled by randomness and the next crash might be something that disrupts the whole system and i'm no expert at all so i'm not saying that this will happen or that it even could happen but i do think that it's worth keeping in mind and i also do suggest that you just never risk everything ever and that you just try to take calculated risk with limited downsides right now that's what i consider index funds to be calculated risks with limited downside because if i was to lose all of my index fund money it would have to mean that apple google tesla microsoft and all of the s p 500 companies would have to go completely bankrupt and if that was to happen we're basically looking at like an apocalypse type scenario so in that case your money probably won't have much value anyway and food might be the new currency so for those reasons i'm currently using index funds as my main way to store value and the amount in percent of my money that i actually store in index funds varies a lot the main idea that i have is to use this as a safer savings account so i'm basically collecting value here that i can then use as funds for my later strategies such as the next one which is trading individual stock now i'm not the biggest fan of warren buffett and totally frank i'm not his biggest fan but he did do a pretty interesting thing a couple years back where he basically issued a challenge to headphones saying that if you beat the market otherwise known as index you win and as you can see from this chart the index beat the hedge funds by a mile meaning that beating the index for mere mortals like myself is basically going to be impossible but i still like to try i sometimes do invest in individual stocks but the idea here is usually that i'm looking at these investments as opportunities to learn about investing so i do of course i'm looking to also i'm hoping to beat the market but the idea mainly is that i want to try to learn in a risk-free way and i want to try to find out how to think about investing and what to look out for in investing later on i will talk about startup investing and even investing in my own business ideas that is also a lot riskier because it usually requires a lot more money to be invested with individual stocks i can take low risk and still have an opportunity to learn another great way to learn about investing in stocks is with stock battle who's sponsoring today's video stock battle is essentially like fantasy football but with stocks as soon as i heard of this i just thought it was such a great idea stock battle uses real-time data from nasdaq and yahoo finance which means that you are testing your skills in real time and i think this is just such a great idea because there's so many people playing fantasy sports of different kinds and to be honest it has very limited value for your life because yes you learn stats about players and you might become really great at predicting who will win but you can't really apply this in the real world outside of sports compared to doing this with publicly traded companies with stock battle you can basically practice your trading skills and compete with your peers that are on the same or similar skill level as you plus you can win real money if you pick the winning stocks you will get three dollars to start with after you've registered and you can withdraw whatever money you win super easily so i highly recommend checking it out gamifying learning about the stock market just seems like such a great idea in my opinion okay so my best advice here for investing in individual stocks would be to look out for companies that are going public and my brokerage firm that i'm using for trading stocks basically sends out emails every now and then with new companies that are going public and this is usually where i'll be focusing my attention on and also doing my research this is a great way to learn too because it's very similar to if a startup came to me and wanted me to invest because then i would have to research the company the market the products or services and the markets for them and everything and anything that could be relevant so this sort of investments although it's riskier than index funds is something that i consider sort of like a real world school tuition if you will and maybe because of pure random luck but i've actually made a lot more than i've lost within these sort of investments but again i only put money in that i can afford to lose and i employ a strategy here where i set a price for myself where i will sell no matter what if it hits that price i will sell everything except the profits on that investment so if i put in a hundred dollars and my predetermined selling price is 101 and then the stock goes up by one percent to 101 then i'll sell a hundred dollars of the stock and leave the one dollar profit still in the stock this way i don't need to worry about the price of the stock anymore since right now the only money that's there is the profit that i made and it's money that i never really had and if you're looking to get into trading individual stocks then i would definitely read up a little bit on stop losses which basically is what i just described but in the opposite direction so basically setting a predetermined low price at which you'll sell but that's automated so even if you're asleep and the stock drops below a certain price you will automatically sell it without needing to physically log in and do it and that's a good way to save you from massive loss next we have the investment strategy that i call business and here we're currently talking about investing in businesses of different kinds right now my main company that's generating revenue is this youtube channel this youtube business today what i'm doing or what i'm about to start doing is investing in index funds just to store that value and protect it against inflation so that once an opportunity comes along i have the capital ready to invest where the goal is to be able to become a sort of angel investor meaning that small startups can come to me with ideas and i can invest in these ideas that i believe in and this would be a very fortunate position to be in where i would essentially take on a dormant investor role in that company and maybe in some cases i would work as an advisor to that company as well this is however quite far away businesses that i'm planning on investing in are also going to be my own ideas and here i actually have something cooking right now that will hopefully be ready to launch fairly soon and that's essentially the main way that i'll be utilizing this strategy as of right now basically just investing in my own ideas and my own companies that i come up with next we have real estate and this is one that i currently have limited experience in i want to get into investing in rental properties of different kinds as this can sort of be a way to generate some passive income along with potential increased value of the properties that i own however this one is a bit hard to know which way to go because there are issues with renting as well especially here in sweden where you basically cannot even kick out a tenant even if they don't pay or like behave really badly it's super difficult to do that and i'm not sure exactly how it works because i still need to read up a lot more on this but i do think that like owning an apartment house or something like that would be a really good opportunity but that also requires a lot more of a starting capital to start doing that but my first move here will be to buy an office space of some kind right now i'm renting the office that i'm currently in and since moving here i've realized some of the problems with renting a space like this the main one being that any changes that i make that increase the value can basically work out unfavorably for me if i renovate the space and spend thousands of dollars doing that then i'm basically paying to increase the value of someone else's property and on top of this the owner or the landlord can actually decide to increase the rent for the space because of the increased value of the property which i he probably wouldn't do that but this is something that he could potentially do and this is why i'm currently on the lookout for a property of some kind that i could actually buy and that will probably be the first type of investment of this kind that i'll be doing with my company and lastly we have crypto which is something that basically right now represents a very small portion of my investment strategy but i do want to increase this a little bit more basically double it from one to two percent and that is because i do believe in the idea behind cryptocurrencies to me it just seems to make sense but as you can see i'm not that bullish on it since i only have one percent invested in it and that's because right now i do think that it's quite risky it's super volatile at the moment or in other words it moves up and down in price a lot which means that right now as a store of value it's not very good because you don't really want to buy anything in ethereum because if you buy something right now for a certain amount then tomorrow the ethereum basically increases by 10 then you've essentially spent a lot more money on that thing than you wanted to spend on it and same thing goes in the opposite direction so you don't really want to sell anything in ethereum because if you sell something today and it decreases in value tomorrow then basically someone got something super cheap from you so therefore it's not a very good store value right now but compared to 2015 it's a lot more stable and compared to 2011 it's like crazy stable right now and this essentially tells us that over time this gets less and less volatile or it has been doing that in the past at least and so someday i do believe that it will be a decent store of value and i also think that right now it's like fairly far away from mass adoption which means that it still has a lot of potential to grow in value as well which makes it at least like a half decent investment opportunity as well okay so that is my investment strategies as it's looking in 2021 and i think that this might be an interesting video to keep making like every year so 2022 2023 and just see like how my thinking about all this and how my investment strategies might change over time because i'm under no illusion or no misconception thinking that i i've got this all figured out right now and that i know everything that there is to know i think this will change as i mature my trading strategies will mature with me any how i met your mother fans out there probably get that reference anyway uh that's it for this one and in case you've missed it i actually post mini courses over on patreon right now so you can check that out there will be a link in the description and yeah that's it for this one i hope you enjoyed it and i hope i'll see you in the next one

Channel: Kalle Hallden

Views: 56,620

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Id: osbIULJaP_c

Length: 14min 53sec (893 seconds)

Published: Fri Aug 06 2021